What is Fair Pay?

There’s a Mad Men scene where Harry Crane where learns that a colleague makes $100 a week more than he does. He believes he deserves a raise, and he ultimately receives a slight raise from his intimidating boss. Do you believe he was happy with the outcome? How about you? Are you paid fairly? In this episode, compensation expert David Buckmaster is going to unpack this fascinating topic based on his book Fair Pay. 

Episode Highlights

• The path to determining a fair wage
• The absolute vs. the relative value of a fair wage
• Do Google engineers complain about fair pay?
• Information asymmetry
• Necessary ingredients for fair pay – authenticity and rigor
• The history of salary surveys (Basset and Patton)
• FOWLs – Future Work of Leaders
• Pay transparency

My Favorite Excerpts Explaining Fair Pay

When pay is fair, there is a shared perception between all parties that the process has been honest, with a nonnegotiable understanding that all people should be paid at least enough for their essentials, including some discretionary income.

Page 24, Fair Pay

Expecting empathy around pay should be universal, because empathy isn’t about status or rank, it’s a human, instinctual response.

Page 32, Fair Pay

If you manage people, think about what will happen if you ask for a pay raise for yourself.

Page 176, Fair Pay

Key Terms to Watch For in Fair Pay

I’ve already mentioned several of the most critical terms and concepts in this book. Since much of this material is new to me, here are a few more terms and ideas to watch out for. If you read this book in a small book club, consider adding this list to discuss in one of your meetings.

T/F Quiz – For CEOs and HR Professionals Only

Answer true or false to the following statements, and be ready to explain your reasoning.

T/F – I view minimum wage workers as though they are invisible.

T/F – I believe a person’s minimum wage is only temporary.

T/F – Increasing minimum wages lead to higher unemployment and prices.

T/F – Low pay; that’s just how the world works.

T/F – I should replace the term minimum wage with minimum viable wage.

Some of David’s Favorite Books

1. Books by Wendall Berry
2. Life in the Crystal Palace
3. The Management Myth
4. David highly recommends The Good Jobs Strategy – I view this as the perfect pairing for David’s excellent book.

Important Links

• My favorite book review of David’s book at Charter Works
• David’s website
• David’s LinkedIn profile
• The MIT Living Wage Calculator mentioned by David

Episode Pairings